It's Getting Plain Silly: MF Global Hikes Silver Margin To 175% Of CME, Or Over 10% Of Contract

Tyler Durden's picture

Now it's just getting plain silly. Following two margin hikes by the CME, one for 9% and one for 10% this week, now MF Global, run by former Goldman CEO Jon Corzine has joined the fray, and has hiked its silver margin to $25,397. As a reminder, the latest CME margin is $14,513, or about 6% of the contract value of $241,750 assuming a silver price of $48.35. So MF Global's is 175% of the CME! It is obvious that everyone is now hell bent on destroying the parabolic move higher in gold and silver, which is happening for a very good reason: deranged money printing. Although, as yesterday, we very much doubt MF Global, or anyone else for that matter will hike ES margins any time soon. After all, doing anything to stop the Weimar rallyTM in its tracks is treason of the highest degree under Bernanke's dictatorship and is punishable appropriately. In the meantime, can the exchange just make margin trading in commodities illegal and move to all cash? At least that way all the weak momo hands can be relegated to chasing Netflix and other bubbles, making their eventual pop all the more memorable.

h/t @gptrading

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dlmaniac's picture

Definition of insanity at its plainest.

dlmaniac's picture

Raising margin requirement again & again and expecting a different result.

disabledvet's picture

that result being lower pm prices or higher?  i mean "how is MF global's views different from the CME's"?

JW n FL's picture

Max Kaiser Report Silver JPM TALF Goldman Sanders Report

It is time for Americans to take back our Country from the Lobby Whore Government that is OWNED By Wall Street Banks / AAA Rated Corporations! "We the People" need to take back our Country. It is to Bad the Broader Populace is watching Danzig wiff da starz and completely ignorant of the Truth! You can fix Stupid and the Broader Populace is Stupid or Blissfully Ignorant and does NOT! want to know the Truth! America will be a Privatized Corporate Police State Very Soon! Because of the Stupidity! Max Kaiser Report Silver JPM TALF Goldman Sanders Report with a Zero Hedge pat on the back for Tyler!


duncecap rack's picture

I just read something that turned my perception of the silver battle on it's head. I read it from a link on Jesse's cafe american. If anyone had a view on this I would like to hear it.


narapoiddyslexia's picture

One of the Metal Augmentor's core arguments is this quote - ""Of course the background support of a sickly dollar and strong gold along with high commodity prices is definitely a big part of this as well, but these easy conditions for silver will not last forever. "

This is from today's blog entry at

If he is wrong on this, he is wrong on everything. Personally, my belief in the opposite reality is why I bought physical silver. I hope he is right, and I hope I lose money on the silver. But I'm afraid he has his head up his ass and we are all in for a shit storm.

Pick your reality and live in it.

duncecap rack's picture

I was just kind of wondering about the point he made that the shorts were in a stronger position than the longs because they could bail and choose to settle for cash at first settlement. That flew in the face of what I thought which was once they went short they were forced to pony up the physical at the choice of the long. Can they settle at "market" price or do they have to pay a premium? What happens if a long wants his silver and the short wants to settle cash? Is it negotiated? Is it arbitrated? Anyone have experience on settlement rules?

narapoiddyslexia's picture

I'm not familiar with the Comex rules. To me, they are irrelevant. What is happening in the greater world is that the monetary structures that have obtained for decades are coming apart and the entire world is realigning. I strongly suspect we are headed back to a metal standard currency, and I think all the sovereigns think the same thing. Hence, China and Russia have stopped exporting silver and gold and China is raping the earth extracting more gold from its own mines as fast as it can. The captive Chinese miners produce gold for ~$500/oz and are forced to sell it to the state for ~$1000 and it disappears. Moreover, China, Russian, Brazil, India, and South Africa meet in China and start to organize another currency regime and the US is not going to be allowed to play. The odd man in that combo is South Africa, which has a minute economy compared to the others; so why is South Africa invited? Gold, plain and simple. China and the US are the 800-pound gorillas, and they are circling in the ring. Everything that happens on the Comex is as important as a piss in a hurricane. Sideshow, plain and simple. 

JW n FL's picture
by duncecap rack
on Fri, 04/29/2011 - 21:33


I was just kind of wondering about the point he made that the shorts were in a stronger position than the longs because they could bail and choose to settle for cash at first settlement. That flew in the face of what I thought which was once they went short they were forced to pony up the physical at the choice of the long. Can they settle at "market" price or do they have to pay a premium? What happens if a long wants his silver and the short wants to settle cash? Is it negotiated? Is it arbitrated? Anyone have experience on settlement rules?


If the house can deliver and it is cheaper for the house to settle in metal.. whatever the house wants.. that is the easy answer.

in almost all circumstances, to be clear everyone has heard of a guy who was settled in metal.. but none of us have ever been able to speak to him directly and see the slip.. so expect cash as the rule.

Given the higer margin with no premium on the backside for non-delivery you may want to review a chart to see what the ratio is.

Silver is safe.. silver is used.. not stock piled.. and executive order 11110 makes me smile.. can you find counter points? non that out wiegh the FED's Printing Presses.

Good Luck!

narapoiddyslexia's picture

I had never heard of EO 11110. Wiki has a decent article on it. Looks like it was a good source of conspiracy theories.

Silver is fairly safe, especially if you bought it before last summer at a decent price. Even now, though, its ok to buy as long as you don't need to spend the fiat to live.

As to counterpoints, I will look. I know a guy who used to work at the comex so I'll ask him about it.

Hephasteus's picture

Ya it turned my perception of the silver battle on it's head too. I'm going to start cycling my gun every 3 days to make sure it's not sticky and will chamber without a problem. When they start using nomenclature and procedure excuses along with an army of pants pisser trolls. It's the first lady that said enron was a scam time.

JW n FL's picture

I would rather you find a dry gun...

Think AK reliable but m-4 accurate.



FN SCAR .308


Hand gun? FN 5 and 7

If you dont know why the 5 & 7? becuase your wife / kids / grandma can use it easily. As well it defeats body armor with regular ammo (check which Commie State you live in to be sure).


God Bless You and Yours Fine Sir!



greenbear's picture

That would a mark of insanity.

Cash_is_Trash's picture

Seems to be priced into market. Hell, even the end of the world is.

Beat-down and BTFD if the gradient even decreses slightly.

High Plains Drifter's picture

they are just tightening the spring. the tension is great. they now ,cannot stop it. they are desperate.  all this does is strengthen the long term bull market.........


its on, bitchez......its on..........

scatterbrains's picture

At this point I'd like to think there are 100x more people praying for a pull back to get long the physical.. all this does is reveal them to be backed into a corner and panicking. If we don't get nice pull back after all their tinkering then the panic will go the other way. I can imagine massive run away gaps up with powerful follow through if they don't stop this  bullshit.

Banjo's picture



Don't forget to get your hands on the physical. Purchased another 64oz silver two days ago (Australia) 4-5 week wait 2kg bullion bars.

I went to the bullion store at lunch and the queue I estimate to be at least 2 hours  duration. I had to go back to the office and place an order by the phone. I much rather talk the to guys and girls in the office that have been looking after me since 2008.

I had a chat about the queue and joked they should be expanding and they informed me they have purchased additional office space on the same floor.  This thing is just getting started.

A year ago I was able to walk in and walk out with 10kg-15kg silver no problem.

I do accept that we could have violent pullbacks heck $49.5 to $44-45 is a huge swing we experienced recently. I remember piling in about 10kg around January 2011 and it dropped 10% (not happy at that time but Im hanging on riding this raging bull)

Aussie dollar rising has limited my upside gains in the physical metal, the upside is I can buy with a stronger currency as I accumulate.

knowless's picture

silver, artfully crafted, will always bring a high return.. jewelery will always be in demand, even if the market deals you a bad hand, craftsmen are still going to need a benefactor, and what better way to pay but in raw materials?


just a thought.

("always" as in, if everything doesn't crash and burn, but in that case you're still set)

narapoiddyslexia's picture

Very true. True even if the fellow at Metal Augmentor is right - - and the longs have fled the comex. He predicts a downward trend for silver, but his argument is at its core the following statement - "Of course the background support of a sickly dollar and strong gold along with high commodity prices is definitely a big part of this as well, but these easy conditions for silver will not last forever."

I hope he is right, but my fear that he has his head up is ass, is why I own several hundred pounds of physical silver.

I would rather lose money on silver than go thru what is probably coming. "sickly dollar" may not begin to describe it.

Goldenhands57's picture

Banjo.. got a question for one Down Under. Hows the Perth Mint holding up under this pressure on the AG Market? I know the Aussie have the advantage of placing their physical in the vault with other investors metal and up to now the Perth has been as solid as they get for secure storage and actually holding the bullion. Just wondering if you see any changes in perceptions. I live in the Pacific Northwest area of the States and see similar interest but not long que. So far dealers in physical Gold and Silver are not expanding space here. What is noticed is a remarkable increase in homeless on the streets. It's been miserable here this Winter and even so it's quite obvious many more are already hurting from Inflation than Media are reporting.  I agree the recent "Put" in prices sent a few to the Market. That drop was very short lived, recovery to near $50US was swift indeed. Your doing well holding on. Wow!  A month wait for 2 Kg! That'll make a SilverBack sit up and think!        

Banjo's picture

Goldenhands57: I am on the eastern side and deal with the Australian Bullion Company they have offices in Sydney.

I do not have any detailed knowledge regards the Perth mint.

Ergo's picture

MF Global who??  Maybe someone can explain what this will accomplish.  And if the CME were to raise anymore, the time to do so would've been before option expiry/first notice.


Gold rocketed up, and the dollar is on life support.  I won't be scared out of my silver longs!

tiger7905's picture

Looks like silver backwardation is coming to an end and eliminated if you only look at 2013 contracts.

rich_maverick's picture

Since silver broke out above $42, I've moved into accumulating more gold.  Figured we may have a pullback which may or may not give me another opportunity to accumulate more silver.  Yes, I was early.  But, while the PTB are doing their best to keep silver down, gold has been on a stealth run.  Guess when they focus on gold again, silver will resume it's run.  Don't care...  Have been accumulating both, not selling until a new monetary system comes to existence... 


bbq on whitehouse lawn's picture

Extractable gold to silver runs between 30-40 silver gram to one gram of gold. Ive seen in run under 10 to 1 but its rare. If the SGR drops to under 25 i would sell for gold (marry gold date silver).

Now processed and available silver runs maybe 10 to one. Some would say silver is rarer then gold but most of the gold is unavailable for any price.

So its all ballpark and stupid to even think of pricing either silver or gold.

Still its a market and its open for trade.

Lets Hang Parliament's picture

If you are going for physical delivery then "margin" is irrelevant or am I missing something?

All is not well in the state of Denmark...

All the best from the UK which is still in wedding mode but hey dont we do pageantry well or what? Although I expect CNBC fcked it up for y'all?!

Turd - I didnt see you in the Abbey - you must have been invited surely Silver Shirley?!

theprofromdover's picture


As far as I can see, this hiking of margins is designed to slow down speculator idiocy; and actually benefits the rest of us in the real world who will only value physical PMs.

Even the greedy idiots in the paper markets must know they are in for a rough landing one day soon. But like all money-worshippers, they think they are smart enough to safely get out 5 milliseconds before the rest of the dung beetles. I think their shamans are trying to put the steam catapault in reverse a little at a time.


Here's another initiative -why don't they lock in all prices (stocks, commodities, CDS, whatever) for 1 second at a time. That way the speed-of-light robot traders nearest to the market's servers don't get any advantage over the rest of us. Wouldn't be expensive to do, and would slow down the mania (even though most of us really want the purge when it comes, to be cathartic).

They would maybe move off into the dark pools and eat each other.

One day soon...........

In Fed We Trust's picture

I say close all the exchanges.

Let Vegas take over. If you want to bet on price moves, you bet in Vegas.

No Market makers . Period.


dark pools of soros's picture

building the pink sheet slot machines right now!

Goldenhands57's picture

Haha.. I'll go for that one if the Free drinks keep comin my way when in a Day Trade! Got spanked earlier this week..sure coulda used a CR & 7 after that beating!  But, made the loss back by today Noon. Jeez!! No wonder I have grey hair..havta work my ass off just to stay in a positive frame of mind. Vegas it is baby!! 

gorillaonyourback's picture

let them hike the margins, its getting to the point where a hike in the margins means silver is going higher lololol

Gubbmint Cheese's picture

"Do you hear that Mr. Anderson? That is the sound of inevitability.. It is the sound of your death."

will be glad when this manipulative BS is torched once and for all.


Gene Parmesan's picture

Someone needs to pull a class action suit together.

LiquidBrick's picture

Someon needs to pull a class action suit together.


Why bother? By the time you get the judgment there won't be any physical left to buy. The paper judgment and fiat is already worthless. Shit.

CD's picture

There are several underway. Don't hold your breath for a) timely or b) equitable and just resolutions.

alien-IQ's picture

These margin increases are not going to impact the truly big guns...they just make it harder on the little guy...which seems to be the long standing game plan. Push everyone into equities and away from PM's.

All hail the ponzi.

rosiescenario's picture

Right you are....get back to those Cdn penny stocks where you belong!!!

Texas Gunslinger's picture

Do not worry about this news!  Yesterday there was a margin hike, and silver did not crash.

We need to think like long term investors, rather than short term traders.  This is how the big fish make money.

Think like a CEO (chief executive officer), not like a sheep.  

Josh Randall's picture

I liked it better when you were pretending to be Judge Judy - thanks for clarifying what CEO stood for D-Bag

Slartebartfast's picture

LMAO with beer shooting out of my nose!!!

disabledvet's picture

is someone who pretends to be smart better than the opposite?

knowless's picture

sometimes, when first encountering truth, the filters of reality which have suited over time fall apart, and in the awakening, there is a delay in the ability to fully comprehend what others know.

this new truth, one which has subverted a long held line, undermines judgement, and makes a once proud man a fool in his own eyes, attempting to assertain the knowledge of others, he shows that which he does not know, so as to attempt to still enlighten, even though he has shown even himself that his knowledge was sadly lacking.


it is a great man fallen, who comes before us, and hope be that he sees that which before was obscured, and can emerge from his cave of wonder, into the infinite chaos, and again find his determinination to seek and distribute truth.


basic: I don't know, but I would guess either is equally corrosive.


piceridu's picture

LOL, me thinks Texas Gunslinger is slinging a yellow squirt-gun that he got for sitting quietly at his desk. After reading some of his comments in other threads, I'm guessing he's in 1st or 2nd grade?

McPoopypants's picture

actually, that seems about right. not even joking.

SilverIsKing's picture

CEO = chief executive officer?

Wow, thanks.

gravitas's picture

It was, at best, semi-humerous. No?

I must admit, I gave a quiet chuckle when I read that bit.

LongSoupLine's picture

Creamy Energized Oranges?

Crazy Elephant Odor?

Camper's Eating Oatmeal?

Cheap Eyelid Operations?

Corrugated Egg Opener?

Cat Entrails Omelete?

Catastrophic Empire Obliteration (read: Bernanke plan)